Philips Healthcare’s Q1 operating profits plunge
(Reuters) — Royal Philips (NYSE:PHG) reported 1st-quarter earnings showing continued weakness in the healthcare equipment operations that are increasingly vital for the Dutch group as it prepares to spin off its lighting operations.
The maker of consumer goods like shavers, toothbrushes and coffee makers as well as healthcare equipment such as CT scanners and patient monitoring systems said operating profit in healthcare fell -84.4% to €17 million ($18 million) from €109 million in the same period in 2014.
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Philips blamed the fall on a mix of restructuring charges and higher investment in the unit, which delivered 43% of group revenue in 2014 but suffered from a lengthy production shutdown in the U.S. last year.
The company said today that healthcare sales grew 1% in the 1st quarter of 2015, while order intake “showed low single-digit growth.” CEO Frans Van Houten said U.S. production would only be back at full capacity toward the end of 2015.
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“The U.S. economy is growing, but in the markets in which we participate, let’s say healthcare, we see a more flattish outlook,” Van Houten told reporters.
He also said an “enormous slowdown” in the Chinese healthcare market was continuing, though those negatives were offset by improving order intake in western Europe, Africa and India.